The Times - Help to Buy eases way on to property ladder - January 2014

by Aaron Strutt

Jan 13 2014

Competition is likely to increase this year, say industry experts. “Most banks and building societies have just started offering true 5 per cent deposit rates, so competition is likely to rise next year and this will lead to more lending,” says Aaron Strutt, of the broker Trinity Financial. “However, borrowers will need an even better credit score to qualify for a Help to Buy mortgage. If you can raise a 10 per cent deposit you will be able to access significantly lower mortgage rates, whether your loan is via Help to Buy or not. If it is possible to borrow money from parents or even spend a bit more time saving to get the larger deposit, you will save a lot in interest payments.”

He adds: “Qualifying for a Help to Buy mortgage is likely to be difficult particularly if borrowers are not on the electoral role or they have active credit. It is important to build up a history of repaying debt to improve your credit score if you are not used to spending on a credit card or taking out loans.

“Make sure all of your credit is re-registered to your house and it is paid by direct debit each month. We are finding that many borrowers applying for the Help to Buy scheme have their credit linked to their parents’ address and lenders struggle to pick up enough financial information to accept their application.”

Click here to view the full story in The Times and Trinity's mortgage best buy table. £

January 11, 2014